Delaware bankruptcy judge grants motion to keep FTX customer list secret News
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Delaware bankruptcy judge grants motion to keep FTX customer list secret

Judge John Dorsey of the United States Bankruptcy Court District of Delaware rejected in part and ruled in favor in part of a motion Friday by bankrupt cryptocurrency trading company FTX’s debtors and the Official Committee of Unsecured Creditors requesting the company’s customer list stay private.

Dorsey ruled individual customer names would remain permanently sealed while institutional customer names would remain sealed for the next 90 days. However, Dorsey also ruled that some foreign creditors could be revealed that reside in the European Union, despite the fact that the General Data Protection Regulations protect them.

Multiple media companies filed objections to the motion including Bloomberg, Dow Jones & Company, the New York Times and the Financial Times. In the objection, the companies stated:

The law of the United States — constitutional and statutory — guarantees the public a strong presumptive right to inspect bankruptcy filings. That right cannot be abrogated by a party’s assertion of legal obligations under foreign law, including a party’s desire to avoid paying fines to which it might be subject under foreign law.

The US Bankruptcy Trustee also objected to the motion, requesting the release of the names, but not the addresses or email addresses, of customers.

FTX was a cryptocurrency trading and exchange site founded by Sam Bankman-Fried, which filed for Chapter 11 bankruptcy in November 2022, with 102 debtors filing for relief. The company collapsed after running out of financial assets in the midst of allegations that the company defrauded investors. Bankman-Fried is accused of using customer investments to make personal purchases as well as risky financial bets with his crypto hedge fund, Alameda Research, amounting to a digital Ponzi scheme.

Bankman-Fried was arrested in the Bahamas in December 2022 and was extradited to the US to face criminal and civil fraud charges. Bankman-Fried was subsequently granted bail and pleaded not guilty, with media companies requesting the release of Bankman-Fried’s bail suretors. Bankman-Fried was also charged in March with bribing Chinese officials to unfreeze his assets.

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